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The Zacks Consensus Estimate for IREN’s fiscal third-quarter revenues is currently pegged at $213 million, indicating 43.8% year-over-year growth.
The consensus mark for the bottom line is currently pegged at a loss of 18 cents, unchanged over the past 30 days. This indicates a sharp year-over-year deterioration from earnings of 11 cents.
Image Source: Zacks Investment Research
Over the last four quarters, the company has struggled to surpass expectations, missing the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative earnings surprise of 205%.
Our proven model does not conclusively predict an earnings beat for IREN this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.
IREN is increasing its AI cloud capacity to 150,000 graphics processing units (GPUs), which positions the company to capture accelerating AI cloud demand in the third quarter of fiscal 2026. IREN's latest expansion includes a purchase agreement of more than 50,000 NVIDIA B300 GPUs. This expands the company’s total GPU fleet to 150,000 GPUs.
IREN’s third-quarter prospects are expected to have benefited from early revenue contribution from the Microsoft contract. Further, customer demand remains strong as the company is in multiple advanced talks for large-scale GPU deployments. During its fiscal second-quarter 2026 earnings call, management said the company had about $2.3 billion of annualized revenue run rate under contract. This includes the Microsoft deal and about $0.4 billion of contracted revenues at Prince George's.
IREN also looks better placed from a funding point of view. The company has secured $9.3 billion of funding over the past eight months through customer prepayments, convertible notes, GPU leasing and GPU financing. This matters because AI cloud expansion needs heavy spending upfront. In the second quarter of fiscal 2026, IREN secured $3.6 billion in GPU financing and received $1.9 billion from Microsoft in customer prepayments, which together cover about 95% of the GPU-related capital spending tied to the Microsoft contract. These factors are likely to have contributed positively to IREN’s AI Cloud revenues in the to-be-reported quarter.
However, IREN is seeing near-term pressure on revenues as it moves away from Bitcoin mining and focuses more on AI cloud services. The company’s focus on no longer being a pure-play crypto-mining company while evolving into an AI Cloud Service Provider means that the company will continue to see lower revenues from its bitcoin mining business on a quarter-over-quarter basis.
In the second quarter of fiscal 2026, total revenues fell 23% from the previous quarter. Management said this drop was mainly due to lower Bitcoin mining revenues, which declined 28.2% on a sequential basis in the second quarter of fiscal 2026. The company is shifting power and infrastructure away from mining and toward AI workloads. AI cloud revenues are increasing, but they are not yet large enough to fully make up for the drop in mining revenues.
Further, higher costs relating to recognition of impairment charges on IREN’s Bitcoin mining hardware as it shifts toward AI cloud infrastructure are expected to have weighed on IREN’s third-quarter prospects. In the second quarter, impairment charges amounted to $31.8 million, representing a sharp increase from $16 million incurred in the prior quarter. These impairments reflect the declining importance and value of IREN’s legacy mining business. IREN’s transition to AI cloud means that these charges are expected to have continued in the near term, due to which reported profitability may come under pressure in the to-be-reported quarter.
IREN Stock Performance
IREN shares have returned 30.6% in the year-to-date period, outperforming the broader Zacks Financial - Miscellaneous Services industry’s decline of 8.1%.
Compared with its peers, IREN has underperformed Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) , while outperforming CleanSpark (CLSK - Free Report) . Year to date, shares of Applied Digital, TeraWulf and CleanSpark have gained 44.9%, 94.1% and 26.7%, respectively.
IREN YTD Price Return Performance
Image Source: Zacks Investment Research
IREN Stock is Currently Overvalued
IREN stock is not so cheap, as the Zacks Value Score of F suggests a stretched valuation at this moment. In terms of forward 12-month price/sales, IREN is trading at 6.29X, higher than the Zacks Financial - Miscellaneous Services industry’s 2.99X.
IREN Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Compared with its peers, IREN Limited has a lower P/S multiple than Applied Digital and TeraWulf, but has a higher multiple than CleanSpark. At present, Applied Digital, TeraWulf and CleanSpark trade at forward 12-month Price/Sales ratios of 13.48X, 16.77X and 4.65X, respectively.
Investment Consideration for IREN
The company enters third-quarter fiscal 2026 with multiple tailwinds, including the phased ramp of its Microsoft AI cloud contract, continued growth in GPU fleet and data center capacity and strong multi-year customer commitments. A strengthened liquidity position and diversified financing reduce execution risk and provide a favorable setup for sequential improvement.
However, IREN’s move into AI cloud and HPC exposes it to heightened execution and competitive challenges. The company now faces direct competition from rapidly expanding peers, such as Applied Digital and TeraWulf, which are scaling their AI data center platforms. While these competitors have already established strong market positions, IREN remains in the early stages of building its AI cloud business, creating uncertainty around its ability to meet growth objectives.
Conclusion: Hold IREN Stock Right Now
IREN’s focus on moving into AI cloud services is showing good early results, and the company has strong contracts, which support its growth potential. However, near-term risks from lower bitcoin mining revenues, along with premium valuation and intense competition in the AI infrastructure space from already-established players, such as Applied Digital and TeraWulf, warrant a cautious approach to the stock.
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IREN to Report Q3 Earnings: Should You Buy, Sell or Hold the Stock?
Key Takeaways
IREN Limited (IREN - Free Report) is set to report its third-quarter fiscal 2026 results on May 7.
The Zacks Consensus Estimate for IREN’s fiscal third-quarter revenues is currently pegged at $213 million, indicating 43.8% year-over-year growth.
The consensus mark for the bottom line is currently pegged at a loss of 18 cents, unchanged over the past 30 days. This indicates a sharp year-over-year deterioration from earnings of 11 cents.
Image Source: Zacks Investment Research
Over the last four quarters, the company has struggled to surpass expectations, missing the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative earnings surprise of 205%.
IREN Limited Price and EPS Surprise
IREN Limited price-eps-surprise | IREN Limited Quote
Earnings Whispers for IREN Limited Stock
Our proven model does not conclusively predict an earnings beat for IREN this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.
IREN Limited has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Impact IREN’s Q3 Results
IREN is increasing its AI cloud capacity to 150,000 graphics processing units (GPUs), which positions the company to capture accelerating AI cloud demand in the third quarter of fiscal 2026. IREN's latest expansion includes a purchase agreement of more than 50,000 NVIDIA B300 GPUs. This expands the company’s total GPU fleet to 150,000 GPUs.
IREN’s third-quarter prospects are expected to have benefited from early revenue contribution from the Microsoft contract. Further, customer demand remains strong as the company is in multiple advanced talks for large-scale GPU deployments. During its fiscal second-quarter 2026 earnings call, management said the company had about $2.3 billion of annualized revenue run rate under contract. This includes the Microsoft deal and about $0.4 billion of contracted revenues at Prince George's.
IREN also looks better placed from a funding point of view. The company has secured $9.3 billion of funding over the past eight months through customer prepayments, convertible notes, GPU leasing and GPU financing. This matters because AI cloud expansion needs heavy spending upfront. In the second quarter of fiscal 2026, IREN secured $3.6 billion in GPU financing and received $1.9 billion from Microsoft in customer prepayments, which together cover about 95% of the GPU-related capital spending tied to the Microsoft contract. These factors are likely to have contributed positively to IREN’s AI Cloud revenues in the to-be-reported quarter.
However, IREN is seeing near-term pressure on revenues as it moves away from Bitcoin mining and focuses more on AI cloud services. The company’s focus on no longer being a pure-play crypto-mining company while evolving into an AI Cloud Service Provider means that the company will continue to see lower revenues from its bitcoin mining business on a quarter-over-quarter basis.
In the second quarter of fiscal 2026, total revenues fell 23% from the previous quarter. Management said this drop was mainly due to lower Bitcoin mining revenues, which declined 28.2% on a sequential basis in the second quarter of fiscal 2026. The company is shifting power and infrastructure away from mining and toward AI workloads. AI cloud revenues are increasing, but they are not yet large enough to fully make up for the drop in mining revenues.
Further, higher costs relating to recognition of impairment charges on IREN’s Bitcoin mining hardware as it shifts toward AI cloud infrastructure are expected to have weighed on IREN’s third-quarter prospects. In the second quarter, impairment charges amounted to $31.8 million, representing a sharp increase from $16 million incurred in the prior quarter. These impairments reflect the declining importance and value of IREN’s legacy mining business. IREN’s transition to AI cloud means that these charges are expected to have continued in the near term, due to which reported profitability may come under pressure in the to-be-reported quarter.
IREN Stock Performance
IREN shares have returned 30.6% in the year-to-date period, outperforming the broader Zacks Financial - Miscellaneous Services industry’s decline of 8.1%.
Compared with its peers, IREN has underperformed Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) , while outperforming CleanSpark (CLSK - Free Report) . Year to date, shares of Applied Digital, TeraWulf and CleanSpark have gained 44.9%, 94.1% and 26.7%, respectively.
IREN YTD Price Return Performance
Image Source: Zacks Investment Research
IREN Stock is Currently Overvalued
IREN stock is not so cheap, as the Zacks Value Score of F suggests a stretched valuation at this moment. In terms of forward 12-month price/sales, IREN is trading at 6.29X, higher than the Zacks Financial - Miscellaneous Services industry’s 2.99X.
IREN Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Compared with its peers, IREN Limited has a lower P/S multiple than Applied Digital and TeraWulf, but has a higher multiple than CleanSpark. At present, Applied Digital, TeraWulf and CleanSpark trade at forward 12-month Price/Sales ratios of 13.48X, 16.77X and 4.65X, respectively.
Investment Consideration for IREN
The company enters third-quarter fiscal 2026 with multiple tailwinds, including the phased ramp of its Microsoft AI cloud contract, continued growth in GPU fleet and data center capacity and strong multi-year customer commitments. A strengthened liquidity position and diversified financing reduce execution risk and provide a favorable setup for sequential improvement.
However, IREN’s move into AI cloud and HPC exposes it to heightened execution and competitive challenges. The company now faces direct competition from rapidly expanding peers, such as Applied Digital and TeraWulf, which are scaling their AI data center platforms. While these competitors have already established strong market positions, IREN remains in the early stages of building its AI cloud business, creating uncertainty around its ability to meet growth objectives.
Conclusion: Hold IREN Stock Right Now
IREN’s focus on moving into AI cloud services is showing good early results, and the company has strong contracts, which support its growth potential. However, near-term risks from lower bitcoin mining revenues, along with premium valuation and intense competition in the AI infrastructure space from already-established players, such as Applied Digital and TeraWulf, warrant a cautious approach to the stock.